Wall Observer BTC/USD - Bitcoin price movement tracking & discussion

[noobtrader]

anyone notice huobi on fire ?  

[ssmc2]

CCMF

[noobtrader]

The funny thing is: we've all been focusing on how the halving will affect the price. But what about the hashrate? If the BTC price is still scraping along the bottom, a whole bunch of mines are going to become unprofitable in an instant.

I have seen someone bring this up on Reddit. In theory, what could happen is the block reward drops, a bunch of miners become immediately unprofitable and get switched off.

Now, because the hash-power has now dropped precipitously, the rate at which blocks are mined drops hugely. This will be corrected at the next difficulty adjustment but difficulty adjustment periods are defined in terms of the block number, not date. With a 10 minute block time, the difficulty adjustment would be scheduled for about 10 days after the halving. If, say, 50% of miners stop mining, block time could increase to 20 minutes and the difficulty would adjust 20 days after the halving. The person who brought this up on Reddit was suggesting that somewhere around 88% of miners could switch off. Long block times could also be damaging to the Bitcoin price leading to even more unprofitability and even more miners switching off. And the longer and longer before the difficulty adjustment, the more miners are likely to switch off. You could argue that miners will keep mining because it's to their benefit to maintain confidence in Bitcoin but it's a prisoner's dilemma situation and it shouldn't be assumed that miners will operate as a charity. Note that not only would long block times just be bad in general, the 1MB block limit would mean that many transactions would not get processed (removing the limit would not be especially helpful if things got that bad though)

Now, I'm pretty optimistic that we won't see this doomsday scenario but I have to admit that it has a fair bit of legitimacy.

when the halving comes
hash-power won't drop so dramatically
Its not as tho the big farms aren't turning a profit...
and miners only get more efficient.
so there will most definitely be a lot of miners dropping out but closer to 10-25%, hashrate will drop out, and then start to climb again....


i was thinking i should maybe get into minning

when the tech is kinda topping out i could buy a 2000$ minner just to heat my home in the winter.  

but i wonder...  using the miner to heat your home you might make the net electricity cost XX$

if you save 300$ in heating a year and it cost you 380$ in electricity ... and you gentarte 1BTC... no bad

the big problem with mining profitability is staying current with the latest hardware. you'll generate 1BTC first year and 0.5 the next and then 0.25

still if the saving on heat mean you only really spent 80$ minning that 0.5BTC all year... why not.

yes sure unless... your miner died 2 month after you receive it.

[ssmc2]

We get this above 345 and it's ON

[ChartBuddy]

Coin



Explanation

[Tzupy]

We get this above 345 and it's ON

Well, this could be a bit of a problem... I plan to close 50% of my long just below that, to lock some profits, and others may think the same...

[noobtrader]

[Suspicious link removed]

yes i know i know... your altcoin monoro will be worth less soon with all this bullrun... im sorry for your loss

[ssmc2]

We get this above 345 and it's ON

Well, this could be a bit of a problem... I plan to close 50% of my long just below that, to lock some profits, and others may think the same...

To be honest I don't think it'll happen...right now. Seems we need to retest 300 or upper 2xx again before the next big move up. Either way, it will happen by the end of the year.

edit: probably the end of the month

[mb300sd]

Hey, look, it's perfectly symmetrical!

[spud21]

We get this above 345 and it's ON

Well, this could be a bit of a problem... I plan to close 50% of my long just below that, to lock some profits, and others may think the same...

To be honest I don't think it'll happen...right now. Seems we need to retest 300 or upper 2xx again before the next big move up. Either way, it will happen by the end of the year.

edit: probably the end of the month

The move up looks suspicious to me. I think it could crash back down again, but if it can stay above 330 for another day then it might be bullish. It's already wavering above and below 330 so traders aren't sure what it's going to do yet. I'm going to observe it and not make any panic decisions.

[ssmc2]

We get this above 345 and it's ON

Well, this could be a bit of a problem... I plan to close 50% of my long just below that, to lock some profits, and others may think the same...

To be honest I don't think it'll happen...right now. Seems we need to retest 300 or upper 2xx again before the next big move up. Either way, it will happen by the end of the year.

edit: probably the end of the month

The move up looks suspicious to me. I think it could crash back down again, but if it can stay above 330 for another day then it might be bullish. It's already wavering above and below 330 so traders aren't sure what it's going to do yet. I'm going to observe it and not make any panic decisions.

It looks awfully similar to the rise just before the drop on the 10th...

[noobtrader]

...
It looks awfully similar to the rise just before the drop on the 10th...

That's what they want you to think. Helps them accumulate...
This train is bound for glory, with or without you. Buy now or cry later.

CCMF!

omg

This is SPARTA !!!!

[ChartBuddy]

Coin



Explanation

[Richy_T]

when the halving comes
hash-power won't drop so dramatically
Its not as tho the big farms aren't turning a profit...
and miners only get more efficient.
so there will most definitely be a lot of miners dropping out but closer to 10-25%, hashrate will drop out, and then start to climb again....

When the halving comes, after the next difficulty adjustment comes, there will be half the value of bitcoins being produced so about half of the mining power (the least efficient half) will be shut down. This is not a big deal.

The issue is the time between the halving and the difficulty change. Up until the halving, miners will be throwing in hash power to get as big a share of the rewards as possible. This cuts profitability. After the halving, it's suddenly a different game.

Let's say that, for example, it takes an average of $7 of electricity to generate $10 of bitcoins. That's a pretty good profit margin and is probably over-generous. Now the halving happens and suddenly everyone is spending $7 of electricity to generate $5 of bitcoins. The most sensible thing to do is switch off until the next difficulty change. The problem is, this is not just for one miner but any of them who are paying over $5 of electricity to generate a bitcoin.

Now, as I say, I think this won't come to pass for various reasons but those reasons are not very solid.

[Alley]

Half the value of bitcoins produced means half the miners will be shut down?  This is a false statement.

[Richy_T]

Half the value of bitcoins produced means half the miners will be shut down?  This is a false statement.

To a rough approximation, it is realistic. If you have a payroll of $500k and that gets you 10 workers of the appropriate skill level, if you cut that payroll to $250k, you can now get 5 workers of the appropriate skill level.

Of course, there is likely to be some increase in hashing efficiency over time but we are talking less than two weeks so I am ignoring that.

This is irrelevant to the point anyway.

[dropt]

Half the value of bitcoins produced means half the miners will be shut down?  This is a false statement.

To a rough approximation, it is realistic. If you have a payroll of $500k and that gets you 10 workers of the appropriate skill level, if you cut that payroll to $250k, you can now get 5 workers of the appropriate skill level.

Of course, there is likely to be some increase in hashing efficiency over time but we are talking less than two weeks so I am ignoring that.

This is irrelevant to the point anyway.

Only if all employees are being paid the same wage.  Thus it only works if you assume that all Miners pay the same overhead, but they don't.   The largest players have efficient equipment and are in low low low cost areas.  Sure, we will see some drop in hash power, but I expect it to be like the last halving: barely noticeable.

[galdur]

We get this above 345 and it's ON

Well, this could be a bit of a problem... I plan to close 50% of my long just below that, to lock some profits, and others may think the same...

To be honest I don't think it'll happen...right now. Seems we need to retest 300 or upper 2xx again before the next big move up. Either way, it will happen by the end of the year.

edit: probably the end of the month

The move up looks suspicious to me. I think it could crash back down again, but if it can stay above 330 for another day then it might be bullish. It's already wavering above and below 330 so traders aren't sure what it's going to do yet. I'm going to observe it and not make any panic decisions.

It´s a bear market so any bullish moves are suspicious until they become a trend I guess. It seemed to find a convincing bottom back there in January and had since been testing a range between what 220-300 until this big move recently. I think it´s starting to form a new and higher range after checking out the old one pretty well, maybe the bottom of that will turn out to be around 300 could be a little lower, time will tell.

[galdur]

Also, if the market anticipates the halving next year to be bullish, it should be starting to price that in about now. Markets try to be ahead of the curve after all.

[Fatman3001]

BAAAAAAAAHHHHH!!!!



We're ready for takeoff!!!